Munster Flags 23% 2027 Hyperscaler Capex Growth as AI Spending Stays Hot
Updated
Updated · Business Insider · Jul 22
Munster Flags 23% 2027 Hyperscaler Capex Growth as AI Spending Stays Hot
3 articles · Updated · Business Insider · Jul 22
Summary
2027 capex growth is the key AI earnings metric, Gene Munster said, arguing hyperscaler spending is unlikely to cool as much as Wall Street expects during the coming tech-results cycle.
23% is the current Street forecast for CY27 hyperscaler capex growth, but Munster said whisper expectations have risen after Google’s $85 billion and Amazon’s $25 billion capital raises.
Microsoft is the main narrative risk in that capex debate: Munster expects management to keep its 2027 growth outlook at 26%, even after the stock’s 20% year-to-date decline.
Three of four hyperscalers raising their outlooks would keep the AI infrastructure bull case intact, with cloud trends and capex plans the two biggest signals investors should watch in Q2 earnings.
Nvidia’s valuation has already compressed to 16 times 2027 estimates from 30 times last year, and Munster says earnings growth above 20% annually could still support further gains.